Through the first nine months of 2017, our forecast performance when measured by the deviation from actual levels is tracking within 5.0% for the 12 DPP trades and 0.02% for the seven CPP trades in our Tanker Market Outlook. When compared to our front month forecasts from last month’s Short Term Outlook, we forecast September’s rates within 13% of actual market levels. Finally, in January, we project monthly rates given our proprietary model of seasonality behavior. For September, our January projections tracked within <0.1% of actual levels.
Politics and Pipelines
Oct. 10, 2017
Tensions in the Middle East have risen in recent weeks as the September 25 referendum in the Kurdistan region of Iraq received about 70% of registered voters and concluded with an overwhelming “yes” for independence. Immediately following the event, a curfew was established in Kirkuk and the Iraqi government considered sending troops into the area. While the use of military force has yet to be realized, Turkey is considering shutting Kurdish access to the pipeline to Ceyhan. The Kurdish Regional Government (KRG) stopped reporting its crude volumes; however, Iraqi volumes exported through the pipeline equated to about 550,000 b ...
Going Long on LR Tonnage
Sept. 28, 2017
Long-range product carriers operating in the Arabian Gulf region have enjoyed a recent run-up in rates as assessments for TC1 and TC5 have traded up 38% and 25%, respectively, since the start of September. In general, demand within this market has come under some pressure this year amid increased refining capacity in the East serving local demand as well as an extended maintenance schedule at refineries in the Middle East this year. Since late summer, maintenance levels have tapered off, redirecting cargo demand back to the market with a considerable jump in activity over September. Through September 28, we have ...
Crude Strength Will Be Short-Lived
Sept. 21, 2017
A steady flow of Northern European crude has been making its way to Asia this year as OPEC production cuts continue to boost pricing for Middle Eastern grades and push Eastern refiners to source barrels from the Atlantic Basin.
Mediterranean Crude Moves East
Sept. 19, 2017
The Mediterranean region continues to grow as a demand center for dirty tankers from a load perspective as the run up in regional crude supply has pressured pricing and increased arbitrage opportunities in a lower freight rate environment. Mediterranean crude supply is on track to rise by 460,000 b/d this year amid a recovery in Libyan and Kazakhstan production as well as redirected Russian barrels into the Black Sea.